IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

ANOTEK
, LLC, ) ) Plaintiff, ) )

v. ) C.A. No. N 19 C

- 0 4

- 211 JRJ ) VENTURE EXCHANGE, SCS and ) VNX, S.A., ) ) Defendant s

. )

Date Submitted: March 2 6 , 2021 Date Decided: June 22
, 2021

ORDER

U pon consideration of Defendant VNX, S.A’s Motion to Dismiss for Lack of

Personal Jurisdiction, 1 IT APPEARS THAT :

1. On April 23, 2019, Plaintiff Anotek , LLC (“Anotek”) , a Delaware

limited liability company, filed a three

- count Complaint against Venture Exchange,

SCS (“Venture Exchange”) , a Luxembourgian business entity. 2 The Complaint

asserted various causes of action that allegedly arose out of an agreement between
Anotek and Venture Exchange (the “Servic es Agreement”)

. 3 Paragraph 10 of the
Services Agreement provided that Delaware ’s courts would have jurisdiction to

1 Motion o f Defendant VNX, S.A. t o Dismiss f or Lack o f Personal Jurisdiction (Trans. ID. 66117961 ). 2 See generally Complaint ( Trans. ID. 63191539 ). 3 Id. at ¶¶ 30

– 46 (alleging claims of B reach of C ontract, B reach of the I mplied C ovenant of G ood F aith and F air D ealing, and U njust E nrichment (in the alterative to B reach of C ontract) ).2

resolve any dispute arising out of the Services Agreement; hence, this Court had
personal jurisdiction over Venture Exchange

. 4

2. Venture Exchange failed to timely respon d t o the Complaint, so Anotek
moved for entry of default judgment on October 29, 2019. 5 The Court entered
default judgment on November 19, 2019. 6 When it sought to execute on its
judgment, Anotek learned that Venture Exchange had been liquidated. 7 Upon
further investigation, Anotek came to believe that Venture Exchange had

reconstituted itself as Defendant VNX, S.A. (“VNX”). 8

3. On April 8, 2020, after obtaining leave of the Court, Anotek filed an
Amended Comp laint naming VNX as successor in interest to Venture Exchange

. 9

Anotek asserted the same causes of action against VNX that it had asserted against

Venture Exchange

. 10 Anotek also included several allegations relevant to its claim
that VNX is a successor in interest to Venture Exchange

. 11 Anotek made m any of

those allegations on information and belief. 12

4 See id. at ¶ 8. There is no dispute that the Court had personal jurisdiction over Venture Exchange. 5 Plaintiff’s Motion f

or Entry o f Default Judgment Against Defendant (Trans

. ID

. 64366468).
6 Order Granting Proposed Order for Entry of Default Judgment (Trans. ID. 64444887).
7 Motion for Leave to File Amended Complaint, at ¶ 3 (Transaction ID 64620982)

. 8 Id. at ¶ 4. 9 Amended Complaint (Trans. ID. 65567030)

. 10 See id. at ¶¶ 33

– 38, 50

– 62. 11 Id. at ¶¶ 39

– 49. 12 Id. at ¶¶ 39

– 44

.3

4. On November 17, 2020, VNX filed the instant Motion to Dismiss for

Lack of Personal Jurisdiction pursuant to Superior Court Civil Rule 12(b)(2)

. 13 VNX
argues that Anotek has provided the Court with no “confirmed factual basis” to

conclude that the Court has (or might have) personal jurisdiction over VNX. 14 This

is because, a ccording to VNX, “all of Anotek ’s allegations related to personal
jurisdiction on a successor liability theory are stated on information and belief .” 15

Anotek responds that its Amend ed Complaint adequately allege s successor
liability. 16 And even if it does not
, Anotek continues, th e Court should allow Anotek
to amend its Amended Complaint
, conduct jurisdictional discover y, or both

. 17

5

. W hen a non

- resident defendant files a motion to dismiss for lack of
personal jurisdiction, the plaintiff bears the burden of showing that jurisdiction is

proper. 18 But when the plaintiff has not had the benefit of jurisdictional discovery

—

as is the case here

—

the plaintiff’s burden is only to “make a prima facie showing

13 See generally Motion o f Defendant VNX, S.A. t o Dismiss f or Lack o f Personal Jurisdiction

. On January 7, 2021, Anotek filed its Responding Brief

. See generally Plaintiff’s Opposition t o Defendant’s Motion t o Dismiss (“Responding Brief”) (Trans. ID. 66234337). On January 21, 2021, VNX filed its Reply Brief. Reply Memorandum i n Suppport [sic] o f Motion o f Defendant VNX , S.A. t o Dismiss f

or Lack o f Personal Jurisdiction (“Reply Brief”) (Trans. ID. 66271925)

. On February 15, 2021, the Court held oral argument on VNX's Motion to Dismiss

. See Judicial Action Form (Trans. ID. 66339826 ). 14 Tr. of Oral Arg., at 11 : 6 ( Feb. 15, 2021) (Trans. I D. 66704245 ). 15 Id. at 7:12

– 15

. 16 Responding Brief, at ¶ 2. 17 Id. 18 Hedger v. Medline Indus. , 2017 WL 396770, at * 2 (Del. Super. Ct. Jan. 27, 2017) (citation omitted).4

that the exercise of personal jurisdiction is appropriate.” 19 In determining whether
the plaintiff has made that showing, “the Court must accept all well

- pleaded factual
allegations as true and draw all reasonable inferences in favor of the plaintiff.” 20

6

. Anotek’s theory of personal jurisdiction is based on a substantive claim:
that VNX is Venture Exchange’s successor entity

. 21 So the Court must touch on the

substance of successor liability to resolve the jurisdictional issue

. There are four
independent bases for finding successor liability: (1) “assumption of liability,” (2)

“ de facto merger or consolidation,” (3) “mere continuation of the predecessor under

a different name,” and (4) “fraud.” 22 Any one of those bases justifies imposing the
liabilities of a predecessor company on a successor company. 23 Here, t hat means

that the Court must deny VNX’s Motion to Dismiss if the Amended Complaint

contains well

- pleaded factual allegations as to any of these bases of successor
liability.

19 Srinivasan Rajamani v. Revways Corp. , 2019 WL 169316, at * 1 (Del. Super. Ct. Jan. 11, 2019) (italics added) ( citing Wiggins v. Physiologic Assessment Servs., LLC , 138 A.3d 1160, 1164 (Del. Super. Ct. 2016)). 20 Id. (citing Wiggins v. Physiologic Assessment Servs., LLC , 138 A.3d 1160, 1165 (Del. Super. 2016)). 21 Id. at *2 ( “Delaware law is settled that a successor entity can be subject to personal jurisdiction related to acts of its predecessor entity.” ). 22 Id. ( internal quotation marks omitted) (quoting Ross v. DESA Holdings Corp. , 2008 WL 4899226, at *4 (Del. Super. Ct. Sept. 30, 2008) ). 23 See id. at * 1

– 2 ( denying the defendant ’ s motion to dismiss for lack of personal jurisdic tion because plaintiffs adequately pled some

— but not all

—

bases of successor liability ).5

7

. In its Amended Complaint , Anotek alleges that VNX is subject to
successor liability under all four bases. 24 In support of that allegation, Anotek makes

several factual allegations about the relationship between VNX and Venture
Exchange
, but it makes most of them on information and belief

. 25 VNX has drawn

the Court’s attention to that qualifier

. I t has supplied the Court with a number of

non

- Delaware decision s “ standing for the proposition that allegations made on

information and belief are insufficient to establish a prima facie case of personal
jurisdiction

. ” 26 But the Court need not look beyond its own past decisions to address

this issue

. In Srinivasan Rajamani v. Revways Corporation , the plaintiffs pled three
bases of successor liability

. 27 The vast majority of the ir supporting allegations were

made on information and belief. 28 Nonetheless, the Court found that t he plaintiffs

24 Amended Compl aint , at ¶ 47

. 25 Id. at ¶¶ 39

– 44

. 26 Letter to Court (Trans. ID. 66353727) (italics added) (enclosing Carbone v. Deutsche Bank Na t’ l Trust Co. , 2016 WL 4158354 (D. Md Aug. 5, 2016) ; Transducer Sys. v. STFO Trading LLC , 2009 WL 10700319 (C.D. Cal. Oct. 15, 2009) ; Neewra, Inc. v. Manakh Al Khaleej Gen. Trading & Contr. Co. , 2004 WL 1620874 (S.D.N.Y. July 20, 2004) ; Bauer v. Douglas Aquatics, Inc. , 698 S.E.2d 757 (N.C. App. 2010) )

. 27 See Srinivasan Rajamani v. Revways Corp. , 2019 WL 169316 , at *1

– 2 (Del. Super. Ct. Jan. 11, 2019). 28 Compl aint, Srinivasan Rajamani v. Revways Corp. , C.A. No. N18C

- 07

- 196 FWW (Trans. ID. 62260744), at ¶ 11 (“Upon information and belief, beginning in or around the Spring 2015, Revways’ owner, Arbas Ahmed Siddiqui (“Siddiqui”) began taking the proceeds from Plai ntiffs’ work and applying it to another investment (if not more than one) unrelated to Revways.”); id. at ¶ 12 (“Further, upon information and belief, Siddiqui began siphoning money outside of the United States in order to avoid liabilities within the Unit ed States, including but not limited to the money owed to Plaintiffs.”); id. at ¶ 19 (“Upon information and belief, Siddiqui eventually abandoned Revways and began operating Feaura.”); id. at ¶ 20 (“Upon information and belief, Feaura performs the same wor k that Revways had.”); id. at ¶ 21 (“Upon information and belief, Siddiqui was the sole owner, shareholder, and officer of Feaura and is the sole owner, shareholder, and officer of Feaura.”); id. at ¶ 22 (“Upon information and belief, Siddiqui abandoned Revways

– and6

adequately pled successor liability and
, for that reason
, denied the defendant’s
motion to dismiss for lack of personal jurisdiction. 29

8. Next
, not all of Anotek’s allegations relating to successor liability are

made on information and belief. Namely, Paragraph 4 5 contain s specific factual
allegations in support of the “mere continuation” basis of successor liability:
By way of example and not limitation, Plaintiff states the following in support of the allegation that VNX, S.A. is a mere continuation of Venture:

a. VNX, S.A. uses the same website, VNX.IO, as Venture.
b. The Board of Directors for VNX, S.A. are the same individuals who served on the Board of Directors for Venture.

c. VNX, S.A. has published a white paper on its website which is virtually identical to a document prepared by Plaintiff in conjunction with Venture. 30
Assuming that these allegations are true

— as t he Court must

— Anotek’s allegation
about the shared members of the companies’ boards of directors suggests that there

is a “ continuity of ownership or control ” between the companies, which is a n

indication of “mere continuation

. ” 31 The Court therefore finds that Anotek has

satisfied its low bar : to make a prima facie showing that exercising personal

began operating through Feaura

– to avoid liabilities associated with Revways.”); id. at ¶ 24 (“Upon information and belief, Feaura now possesses all, or most of, Revways’ assets, whic h by

in

- large consist of goodwill, propriety information such as draft agreements, customer lists, and other business contacts, and inexpensive computer

- related equipment.”); id. at ¶ 25 (“Upon information and belief, Revways does not currently operate any business or own any assets.”). 29 See Rajamani
, 2019 WL 169316 , at * 1. 30 Amended Complaint, at ¶ 45. 31 Ross v. Desa Holdings Corp. , 2008 WL 4899226, at *4 (Del. Super. Ct. Sept. 30, 2008) (citation omitted)

.7

jurisdiction over VNX is appropriate. Because of this finding , and because this case

mirrors Rajamani in all relevant ways
, VNX’s Motion to Dismiss for Lack of

Personal Jurisdiction is DENIED

. NOW, THEREFORE, IT IS HEREBY ORDERED that Defendant VNX,

S.A.’s Motion to Dismiss for Lack of Personal Jurisdiction is DENIED

.

IT IS SO ORDERED. 

# Jan R. Jurden

Jan R. Jurden, President Judge

cc: Prothonotary